For Immediate Release - May 30, 2002

One of the tougher issues the legislature dealt with in the budget this year was deciding which programs could do with less money without harming Missourians. One of the programs that was closely scrutinized was Medicaid.

Since 1992, the total number of Missourians eligible for Medicaid has grown from 462,090 to 734,765. The total cost for this program was $4.5 billion this year ($814 million general revenue), averaging out to just over $6,000 per eligible person.

At the start of the budget process, the Department of Social Services requested an appropriation of $4.9 billion for fiscal year 2003. But facing the bad budget news the state kept getting, the legislature ended up giving Medicaid $4.2 billion, a net decrease of $300 million ($100 million general revenue).

A good chunk of this decrease came from something known as 1115 waiver coverage for parents in the Medicaid program. While the program wasn't eliminated, it was significantly modified. For instance, one part of the program covers parents transitioning off welfare, making sure they still have access to things like medical care while they're getting back on their feet. This can be a great boost for some people who really want to get a job and support their family. But the program was covering parents with incomes of up to 300% of the federal poverty level - around $50,000 for a family of four.

A family making $50,000 a year certainly doesn't qualify as rich, but that seems like a pretty high income to be eligible for Medicaid. The legislature lowered the income eligibility amount to a more reasonable level, and also changed the time limit on coverage from two years to one, saving the state around $1.5 million a year.

A more significant savings came in standardizing eligibility for many parents to the same eligibility level as Missourians that are aged or disabled. In recent years, thousands of able-bodied parents with children under eighteen could receive Medicaid although they had higher incomes than those who can't work.

The Governor and the Department of Social Services requested and the legislature agreed to make changes to the "spend-down" provisions of Medicaid. Several government programs, like Medicaid, have specific eligibility limits like income. These arbitrary limits don't always make sense. For instance, someone could make just above the Medicaid income limit, but have a prescription drug bill three times as high as someone just under the limit. The person just above the limit would get no coverage at all, while the person just under would get full coverage for their smaller bills.

To address this, Missouri has had a spend-down provision, meaning that someone over the Medicaid income limit who still has high medical bills can "spend down" to the income limit and then begin receiving Medicaid coverage. For instance, someone making $250 over the income limit would pay the first $250 of their medical bills out of pocket, and then be covered by Medicaid. This seems to make a lot of sense.

Last year, however, we came to realize that the Department of Social Services was not operating the program as we thought. If recipients ran up enough medical bills at one time to meet the "spend down" amount, the state and federal government picked up the entire tab, without the recipient actually "spending down" at all. Lots of people had figured out how to work the system so that they could be considerably above the eligibility limit and never have to pay any out of pocket expenses. Savings from adopting the administration's proposal should save the state $6.4 million and will save the federal government even more. Additionally, it will be much more fair to all concerned.

All in all, the legislature found about $140 million in general revenue savings in the Department of Social Services' budget, $100 million of which came from Medicaid. While no one liked having to make the difficult choices on what to cut, tough budget years like this one can almost be a blessing in disguise. When times are good, everyone wants a piece of the pie and there's plenty to go around. There's so much to go around, in fact, that it's easy to stop checking to make sure the money is being spent efficiently and where it's most needed. When times are bad, everyone still wants their pie, but we have to be a little more cautious about who gets what and how much. In several cases both the Governor and the legislature did good work in prioritizing spending to help those most in need.

If you have questions or comments concerning this issue or any other issue involving state government, please do not hesitate to contact me. Also, if you would like to receive a copy of this weekly column at your home via e-mail, please contact my office and give us your e-mail address. My address is: Senator Larry Rohrbach, State Capitol, Room 221, Jefferson City, MO 65101. The phone number is (573) 751-2780. My e-mail address is larry_rohrbach@senate.state.mo.us. Keep in touch!